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In his opinion for the majority, Justice Robert M. Mallano said the complaint
sufficiently alleges that the lawyers owed the plaintiffs independent duties not
to interfere with the remediation plan and not to disburse the remediation funds
unfairly.

The litigation privilege does not apply on these facts, and allowing the
conspiracy claim to proceed will not intrude on the attorney-client privilege,
the court also ruled.

The dissenting panel member asserted that the majority opinion conflicts with
California precedent and muddies the law on attorney-client conspiracy
claims.

Neighbor vs. Neighbor

Rebecca Rickley and Natasha Roit live next door to Marvin Goodfriend and Tina
Fasbender Goodfriend in Malibu, Cal. During a remodeling project, the
Goodfriends allegedly dumped debris contaminated with asbestos and lead on their
neighbors' property as well as their own.

“[T]he attorney-defendants owed plaintiffs an independent
legal duty not to prolong the nuisance by interfering with the remediation
plan….”

Justice Robert M. Mallano

A trial court ordered Marvin Goodfriend to abate the nuisance on both
parcels, and $230,000 of remediation funds were placed in the trust account of
his attorneys, James N. Procter and Daniel R. Stevens.

Later Rickley and Roit went back to court alleging that the Goodfriends had
not complied with the judgment. The judge allowed the plaintiffs to add a cause
of action for civil conspiracy against Procter, Stevens, and their law firm on
the ground that they had schemed with their clients to interfere with the
court-approved remediation plan and to disburse the funds from the trust account
so as to avoid removing the contaminated debris.

The court of appeal affirmed, holding the plaintiffs' conspiracy claims may
proceed because, on the facts alleged, the lawyers owed two independent legal
duties to the plaintiffs: (1) an obligation not to interfere with the
remediation plan for removal of the contaminated debris, and (2) a duty to
disburse the funds in the attorneys' trust account in a fair manner to remediate
both properties.

The court pointed out that although Section 1714.10(a) of the California
Civil Code erects procedural hurdles for filing conspiracy claims against
lawyers and their clients, the statute exempts claims grounded on a lawyer's
independent duty to the plaintiff.

It is well established, the court said, that lawyers have an independent
legal duty to refrain from defrauding nonclients. An independent duty also may
arise when a lawyer engages in conduct that goes far beyond the role of a legal
representative, circumventing established legal channels to help accomplish a
desired result, Mallano said.

Affirmative Interference

While acknowledging that agents are generally immune from a conspiracy claim
for violating a duty that the principal owes, the court said that Procter and
Stevens had independent duties to the plaintiffs and allegedly took affirmative
steps that interfered with the remediation plan. Mallano pointed out that:

• Procter
allegedly interfered with the cleanup effort by sending contractors emails that,
contrary to court order, had not been cleared by the trial court or plaintiffs'
counsel, and by providing contractors with information or instructions that
interfered with the remediation plan.

• Stevens
allegedly went to the site and misdirected a contractor's work in removing a
tree--even performing some of the digging himself--contrary to the trial court's
instruction.

“[T]he attorney-defendants owed plaintiffs an independent legal duty not to
prolong the nuisance by interfering with the remediation plan,” the court
declared.

Moreover, the court said, when the attorneys voluntarily placed Marvin
Goodfriend's money in their trust account they assumed a duty to disburse the
money equitably, yet they allegedly passed out the funds without the plaintiffs'
knowledge and in a manner that unfairly benefited their clients.

The court also decided the lawyers could be added as conspirators to the
plaintiffs' claim alleging that the Goodfriends violated a California statute on
coastal development permits by failing to place contaminated debris in an
appropriate disposal site.

Once a conspiracy was formed to continue the existing nuisance by interfering
with the remediation plan, the court said, the lawyers were liable not only for
their own wrongful acts but also for the Goodfriends' disposal of the
contaminated debris in an unlawful manner.

Litigation Privilege N/A

The court also held that the lawyers were not shielded by the litigation
privilege, codified in Civil Code Section 47(b).

The privilege generally applies to communications made in judicial
proceedings by litigants or other participants authorized by law to achieve the
objects of the litigation, if the statements have some connection or logical
relation to the action.

The privilege did not apply here, the court decided, because the lawyers'
communications and affirmative misconduct allegedly interfered with the
abatement of a nuisance, involved communications with nonparticipants in the
litigation, and did not attempt to achieve the objects of any litigation.

The court distinguished Rusheen v. Cohen, 128 P.3d 713, 22 Law. Man.
Prof. Conduct 157 (Cal. 2006), which applied the privilege to post-judgment
conduct tied to allegedly fraudulent statements about service of process in the
underlying case. Rusheen did not extend the litigation privilege to
post-judgment communications and misconduct that contribute to a continuing
tort, Mallano said.

The court also reasoned that the goals of the litigation privilege would not
be advanced by conferring immunity on the attorneys. “To apply the litigation
privilege in this case would be tantamount to eliminating civil conspiracy
claims against attorneys,” it stated.

Won't Affect Attorney-Client Privilege

The lawyers argued that allowing the conspiracy claims to proceed would
require the disclosure of communications protected by the attorney-client
privilege, contrary to California cases that have dismissed claims where the
privilege prevents an attorney-defendant from presenting an adequate
defense.

The court disagreed. The plaintiffs' claims do not implicate the
attorney-client privilege, Mallano said, because they are based on the lawyers'
nonconfidential communications with third-party contractors and nonconfidential
conduct such as digging in the soil and sending unapproved emails.

Conspiracies typically are proved by circumstantial evidence, the court
noted.

Dissent

Justice Frances Rothschild dissented, asserting that the majority opinion
conflicts with the leading California Supreme Court decision on conspiracy
claims against lawyers and “introduces confusion and uncertainty into this area
of law.”

The plaintiffs' claims fail as a matter of law, Rothschild argued, because
the lawyers did not act for their own financial advantage or violate their own
obligations to the plaintiffs, but rather allegedly assisted the clients in
violating their duties.

Rothschild also disagreed with the court's analysis of the litigation
privilege and contended that the majority construed the factual allegations of
the complaint too liberally in favor of the plaintiffs.

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